Skip to main content

tv   Squawk Box  CNBC  November 12, 2013 6:00am-9:01am EST

6:00 am
>> good morning. i'm becky quick along with joe kernen. andrew ross sorkin will be joining us in the next hour. coming up around 8:00 eastern time today, andrew will kick off the headliner with barely diller. catch it right here on "squawk box." our guest host this morning on 11-12-13, dennis gartman pointed out that it's 2:15 today in military time it will be 11-12-1314:15.16. first, let's get you up to speed on the morning's headlines. an experimental glaxosmithkline hard drug has missed its main goal in a major clinical late stage study. it was designed to prevent heart attacks and strokes in a completely different way from cholesterol lowering drugs by targeting an enzyme.
6:01 am
the latest legal battle between amppple and samsung begs today. a federal jury awarded apple about $1 billion earlier this year, but the judge tossed out $400 million in damages and ordered a new jury to recalculate damages for 13 samsung products that have been found to be infringing apple's patent. in other technology news, "the wall street journal" reports that google's motorola unit is expected to unveil a low cost phone tomorrow. the announcement is said to come amid weak sales. right now, let's get to the latest from typhoon haiyan. sri joins us this morning from manila. we know the situation is dire. we wonder if there's any better insight that you can give us right now. >> well, what i can tell you is that the relief operation is continuing. it's under way.
6:02 am
but the distribution of goods and essential services, essential relief supplies, food, water and medical equipment is painfully and agonizingly slow. and that's leading to a lot of frustration, anxiety, and anger on the ground among the people in the stricken areas in the eastern and central provinces of this country. what we do know on a more positive note is that the relief operations could very well pick up and be accelerated on the arrival of the uss george washington which hat set sail now from hong kong. it should be arriving in filipino waters by the end of the week as will the british navy'ship. and on board, of course, are helicopters and supplies, as well. so that should be the catalyst for an accelerator or pick up of the relief effort. but in the meantime, still looking very grim on the ground. the death toll continues to rise. the latest estimate i've heard
6:03 am
from a native official here, consolidated numbers are putting it at around on 10,000. but that number could be much higher as more bodies are recovered. >> sri, thank you very much. one of the questions people have been asking this morning is not just what is happening on the mainland, but beyond that on the outlying areas. that's tough to see how bad things are in those areas. >> are you referring to the other southeast asian countries that have been affected like vietnam? >> no. i was talking about some of the outlying areas in the philippines, just beyond some of the areas that they've been able to get into this morning. >> oh, absolutely. you're absolutely right. because you must appreciate the breadth of this super typhoon. it's very difficult to get accessibility is a huge problem and it's very difficult to get through the internal parts of
6:04 am
the stricken areas. the remote areas that have been hit by land slides. so you can imagine just how challenging this task is. but what we do understand is that at this point in time the humanitarian needs assessment have been done and there are three command centers relief hubs, if you will, where the many aid efforts can be integrated, organized and coordinated into one. but as i said, accessibility, a huge problem here. this is a huge logistical challenge and in the meantime, people continue to grow more desperate on the ground. back to you. >> sri, thank you very much. again, sri joins us from manila this morning and we'll check back in with him again tomorrow. >> after the bell yesterday, we got some movers. this first one is interesting just from the viewpoint of activism. it's a small company. network equipmentmaker emulex is buying back $1200 million of its
6:05 am
shares. it's reinstituting its board and this follows pressure from two activists to its major shareholders. bigger story today is what happens to news corp. earnings and revenues fell below street estimates and the media company hurt by lower ad revenue and that stock is lower in after hours trading. raxspace is missing the mark by a nickel. it is, as far as i know, a provider of cloud computing services. yes. >> that's cloud. >> yes, i do. i love the cloud. i have no idea what it is. it's not, like, in a dish like a discreet place. that's all i know. it's everywhere. nowhere and everywhere. and that stock is going to be lower. the company posted revenues in line with consensus. southby's results beat the
6:06 am
street, the auctionary benefited from an increase in commissiones from private sales. the company has been under pressure. got another story here about an activist investor. under pressure from dan loeb will will be, coincidentally andrew's guest. catch their conversation live on "squawk on the street" later this morning. in other news this morning, it's reporting investigators are saying to be checking whether the s.e.c. complies with internal rules that prohibits trading shares of companies under investigations. fewer homeowners are falling behind on their mortgage payments. the percentage of mortgage holders two months behind on their payments fell in the third quarter. the rate has been steadily improving over the last five quarters. and walmart is the latest retailer to announce it's
6:07 am
opening earlier on thanksgiving. black friday sales will start at 6:00 p.m. on thanksgiving day, two hours earlier than last year. the retailer is bringing back what it calls one hour guarantees. this year, they're expanding from three guaranteed items to 21 guaranteed items. that means if you're in line between 6:00 the and 7:00 p.m. on thanksgiving, you are guaranteed to get the boost buster item. years ago, there were people crushing through doors. this is one way to try and stop that crush. >> i wonder if any given day how much walmart sells. it's a staggering number. >> oh, yeah, they have -- there's some days during the holiday season, i forget, i want to look at the revenue number again, but -- >> let's just say in the hourglass, like the stars in the milkyway in terms of dollars almost. in tech news, google glass is going to expand its features now into music. google will unveil a set of futures for glass to search for
6:08 am
song, scan through saved play listes and listen to music in high quality. and the white house is due to release national obama karen rollment numbers sometime this week. and there's stories out there and the journal has a story on it that there are fewer than 50,000 americans that were able to sign up for the new health care law. and that's about -- that's much lower. they were hoping for as many as 500,000 in october. instead, as i said, 50,000 were able to do it through the trouble plagued website. >> i was just looking at revenue for walmart in the fourth quarter. $132 billion in revenue just in the fourth quarter. what is that, about 90 days. so that's massive. >> tom is here. he can probably -- >> it's over $1 billion.
6:09 am
there are definitely days of over 100 billion in revenue. >> there's a hundred billion stars in the milkyway. do you know when you look out, the only stars we can see are in the milkyway? >> yeah. and some of the sfars you see are gone all right, right? >> yeah. potentially, time and space. but there's 100 billion other galaxies, too. >> there's some truth to that. we could be -- our entire planet could be in some animal's nose hair. >> all right. that's one way of looking ate it. why don't we take a look at the markets this morning. >> the big bang theory. >> right. >> let's take a look at the futures this morning. yesterday, you did see the dow closing up by about 21 points. s&p ended up by just over a point. this morning, the dow futures are indicated down by around 26 points. although we did see the markets closing, at least for the dow at
6:10 am
an all-time high. the s&p 500 was almost at an all-time high. oil prices this morning are down by about 26 cents. you can see they're back close to 95 cents a barrel for wti. the ten-year note is yielding 2.782%. that yield continues to pick up. people are expecting, after friday's jobs report, tom, that the fed could taper sooner rather than later. that's what we've seen playing out here. >> yes. >> that's tom lee. he will be with us with more on the market. >> how much more do we have to do before we get to him? >> not much. take a look at the dollar, stronger against the euro. and gold prices this morning, at least right now, are barely down by about 80 cents. $ ,2080.30. ross westgate is standing by in london. >> good morning to you, becky. about 7 to 2 decliners outpacing advancers at the moment.
6:11 am
it always looks worse in terms of the pricing. we are down at a session low. the ftse yesterday was up some 19 points. today we reversed those gains. currently down 18 points, which is translating to 11%. xetra dax off 0.25%. the xetra dax and cac 40 down 0.3%. the ftse mib down 0.5%. all that cash for the verizon stake in the u.s. wireless business, the shares today after you just rebounded up 1.9%, they were down early. you can see the move up in the stock price. they did have a fall in quarterly organic service revenue. a record fall on the quarterly organic service rev mu. and they talk about the market being very tough at the moment, particularly that in core units down to 4.6 billion. but they are going to take 75
6:12 am
7 billion and upgrade networks. they have no comments about whether at&t is going to be interested in the business. but the stock has rebounded. inflation, weaker than expected. the annual rate falling to 2.2%. it will be 2.5%. that's where we stand. back to you. >> all right. ross, we will see you a little bit later. ross was interviewing all kinds of people this morning partnership saw carl wurtz on, i think. yes, i did. the s&p 500 is up 24% this year. our guest host, a well known bull. tom lee has been steadfast in his positive view on the stock market. he's chief u.s. equities strategist at jpmorgan. what was your year-end target? >> 1775. >> it was. so we're there? >> we're close to it, yes. >> we're not there? are we at 1771? >> yeah. we're striking distance. >> that's my question now. and the combination of why we're
6:13 am
here, part multiple expansion and i guess a little bit of earnings growth, right? >> yeah. >> i'm wondering which of those two things is likely to continue from here. just earnings growth? is that what we'll be stuck with now? >> i mean, i think that's what 240 20 14 is going to be, a bit of a battleground between whether earnings revision continue or earnings growth because, you know, this year, the second half earnings is growing high single digits. but i think there's also room for pe expansion. >> you do. okay. because without further pe sxangdz, we're stuck with single digits. max. right? >> yeah. >> or is it possible to get double digit earnings growth, seeing as how profit margins are as historic highs, revenue growth is still tough. we could see the world recover from this sort of caution, this period of caution following the financial crisis. things could get better, i imagine. i don't know if we could do double digits. if we don't, it's unlikely we do
6:14 am
another 25%. >> 25% is maybe a reach. but we have to keep in mind half the s&p countries grow, anyway. because they're basically a defensive stock, meaning they grow every year were year in and year out. it's really the other half that are cyclical that we were wondering can they grow faster next year? and that's -- i think it's a good possibility. and then when we think about multiple expansion, it's really the cyclical stocks trading at multiples. >> what's the average multiple for cyclical? >> let's take tech. tech, depending on which estimates you're using, it's 12 to 14 times. >> it's cyclical. >> true. but cyclicals mid cycle, which is where we are today, normally are at a premium of -- >> a premium to the s&p multiple? >> correct. >> and what do you think of fair s&p multiple is given that interest rates will be moving higher, probably? >> i think even with a rising ten year, even up to 4%, you
6:15 am
know, 16, 17 overall is the fair market pull. >> where are we now? we're barely above 15. >> on this year's or on next year's sfp. >> on forward. >> so we're at 15 on forward .some of the tech stocks are at 12 and 13 and that could be a 20 event. >> yeah, in fact, if you take a look at the mega cap tech, i think more than half a -- under 12. >> but there's a reason for some of them. if you look at ibm and some of the disappointments they've had, do you think that goes away or do you think these stocks rise even in the face of some of that? >> it's hard to distinguish if it's a cyclical or secular issue. tech has been trailing gdp for five years now. i think if you look at capital stock, i think it reminds me of the pharma trade three years ago, right? people look at these low multiples, these clips and thought, it wasn't worth buying. all of a sudden they're a great stock. >> do you look across the board
6:16 am
at a cisco, as an ibm? does microsoft fall in that camp still? >> i'd say all of the above because if you look at free cash yields, you're getting close to double digits in the mega cap tech. >> so you're not ready to say i've had my run, now i'm i'm going to say take your profits, i'm going to say sit on the sidelines? tom, how long have you been bullish? year? years? >> since '09. >> and dennis gartman said at 2:00 p.m., at 2:15.16, it will be 11-12-13 14:15.16. >> anyway, it's funny.
6:17 am
so would tom lee ever say step aside? and go 100% cash so we can buy in at lower prices? would you ever do that? you would? >> you know, in front of the -- >> in 2008 or 2007? >> in 2008, we were cautious. kind of a little late, though. >> but you're not at all now? are you less bullish? are you saying as we continue to rise, sell into that with part of your position or are you saying let's just sit here and expect 2,000 on the s&p some day? >> well, we're looking at this through the lens of the market being in a secular bull market. >> you are. >> which means the next bear market will coincide with the recession. >> we don't know when that could be. it could be any time, couldn't it? or probably not. >> it's hard to predict when the next recession will be. >> how long has this recovery been, five years? >> yes. but it's hard to think that we
6:18 am
would be, you know, in the conditions for a recession, right? because recessions are either monetary tightening events, commodity shocks. usually precreeded by an inverted yield curve. >> was it last night? that you were at the eagles conference? >> yeah, last night. >> what time did you get home? >> midnight. >> midnight. >> it was a long, but great concert. >> so they were here. where were they? >> msg. >> and joe walsh was with them. >> we should be -- >> we're going to be playing -- >> here's my problem. i love the doout dude and the dude is like not the eagles man. he got out of that cap when they got -- and -- actually, the cab he -- >> threw him out. >> but then again, who is the greatest u.s. band? we don't have the greatest band. led zeppelin, pink floyd --
6:19 am
>> rolling stones. oh, wait. >> that's what homer said. you guys have the beatles, we ever trolling stones. who is the greatest u.s. band? >> i think the eagles may be the best selling band in the 20th century. >> that's what i mean. rem, the cars? who is the greatest band? >> so we're going to do -- i was trying to think of if the stock market is already gone or -- >> the chief investment in town with madoff or whatever. >> because i'm -- >> already through there. >> dirty laundry. hotel california. >> check out. >> there's all drugs. >> take it to the limits. >> take it to the limits. >> i know a couple of those guys.
6:20 am
>> glenn fry. >> all right. >> not the eagles, man. you went and you paid money? >> i think the dude was -- he thought that they had somehow -- >> coming up, if you taken a multi vitamin yet this morning? this tells me, this isn't any news to me. >> it is. >> is it more superstition than real with science? you're going to hear about vitamins and supplements and all that stuff. it probably isn't hurting you, but -- >> actually, in some cases it is. it can cause liver damage. >> but first, finally, there's no themes that have nolan. the tampa bay buccaneers finally won a season beating a team the bengals lost to. anyway, the bucs beale the dolphins, 22-19 last night. "squawk box" will be right back.
6:21 am
♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
6:22 am
more shopping. more dining out. more traveling. and along with it, more identity theft. every time you pull out your credit card, shop online, or hit the road, you give thieves a chance to ruin your holiday. you can't be on the lookout 24/7. but lifelock can. protecting your identity, your bank accounts, even the equity in your home. when lifelock detects a threat to your identity within their network, they'll alert you by text, phone, or e-mail, protecting you before the damage can be done. act now and we'll protect you 60 days risk free.
6:23 am
no one protects you better than lifelock. try lifelock protection 60 days risk free and get a special holiday gift -- a document shredder. a $29 value free. ♪ ♪ welcome back, everybody. it's time now for the executive edge. this is a daily segment focused on giving business leaders a leg up. we start with the associated press investigation that finds that the push to produce corn base ethanol has fallen short of producing clean base d energy. among the findings, farmers rush
6:24 am
to go plant more corn wiped out millions of acres of conservation land just over the last six years or so and theydy extraordinary habitat with fertilizers. congress is looking to do away with requirements that producers blend ethanol in with their gasoline. there's no completely solution. >> it's all unintended consequences and the best laid plans -- this president has provided over a lot of this in trying to cut down on emissions. all i know, becky, i spent $8 on some bacon over the weekend. >> you did? was it the nitrate free stuff, though? >> no, no, i don't think so about that. give me some nitrates. it's better than vitamins. >> do you think this is because of the smithfield sale? it's because corn is so expensive that the whole meat complex is more. >> the problem is, it's really tough in the farm states, which
6:25 am
is a significant block both in the house and the senate. it's changed things like that that have been set into play. >> the politics of the situation are something that you need to look at to understand the whole thing. and god bless, i love our farmers. i do. they provide the bounty for the entire world. and, you know, you get on, just like we're on the qe train now, you get on that ethanol train and i think it helps farmers that for years suffered and farmland was depressed. so -- >> not just the farmers. you saw how that spread through to places like caterpillar, like the boom that went through entire economy on these issues. >> but the actual reason for it is now sort of clouded in all these other things, these other reasons that we're sort of addicted to it. and i don't know if the original motivation is even relevant. >> and there's some questions about whether it's even energy efficient. because by the time it takes the energy to grow the corn and all of the equipment that goes into that and by the time you harvest it and bring it in, it ends up
6:26 am
taking a lot of energy, too. so there are questions about whether it is efficient at all. >> becky, i mean, the whole green movement in terms of fuel is because it's not, you know, it really isn't market driven, a lot of it. and i just saw another article today that most green fuel that we got, renewable stuff is three times as expensive as what we're already using for hydrocarbons. and you try and do it, the government, you put really smart people there and they're all experts. nothing is better. we learned this i think in 1776. the invisible hand. that's the way things were. >> it's great to see some cleaner fuels come along. the question is, can you make it sustainable if you are creating this artificial -- it's government funding that goes into that. >> tell the bats that that have been flying into the -- >> there's no such thing as clean and easy. >> does ge still own us? >> no. >> then tell the bats flying
6:27 am
into all those ge wind turbines and the birds that this is good for you. >> you're right. it's the law of unintended consequences. >> do you see that? they're sliced up and they're blind. the poor bats. >> so they don't see it coming. >> bats eat mosquitoes. >> bingo. but you're killing a mocking bird. don't ever do that. kill blue jays, not mocking birds. new research suggests that there is not evidence that vitamins can prevent heart disease or cancer. half of the u.s. population takes vitamins in the hopes of staying healthy and americans spend an estimated $11.8 billion each year on these supplements. but too much of a good thing can be a bad thing. vitamin a can hurt your liver. vitamin e, a supplement for that is basically useless. >> flush it right down the toilet half the time. because if your diet, fauf normal diet at all, you probably get enough.
6:28 am
and if you've ever had chemistry or biochemistry, vitamins are cofactors in enzymatic reactions. if you don't have enough, then there's a problem. but if you do ten times the normal amount, it just goes out with your -- >> and there are some -- >> hard to absorb, too. >> and there are some situations where people take them thinking, it's okay for me to eat junk food because i'm going to make up with them with these supplements. what you need to do is eat fruits, vegetables, whole grains and a low fat diet. the one thing they found vitamins did help is for pregnant women because it can be an important supplement for nursing the baby. >> yeah. it's -- there's a lot of things that people do and i'm talking about across the board as advanced as we are and they invoke science for a lot of things they do, and a lot of it borders on superstition and a lot of this stuff, you might as well throw some salt over your shoulder or knock on wood or whatever. and everybody is afraid of
6:29 am
cancer and heart disease. but, you know, just pop a -- gnc, you walk into the vitamin places, they're not going to tell you. there won't be big signs that say this might not help. i can guarantee you that. >> probably not. but it doesn't take away the fact that -- it doesn't mean throw it out the window and don't do anything. you still have to exercise and have a healthy diet. >> sometimes it might, right? >> that's exactly the point. guys, are you, tom, joe, are either of you planning on cooking this thanksgiving day? >> part of the process. >> i like to. >> excellent, excellent. because of that, you guys are part of on growing demographic for men who are cooking the thanksgiving turkey this year. that's why the butterball hot line is adding male staffers for its 32 years of experience. >> i have some experience. >> this is wrong. i packed it too tight. i was ramming it in there and you don't want to do that. you want to be very loose with the -- we're going to talk to the butterball lady.
6:30 am
>> i'm wondering if we can get a guy on the line this time. >> there are guys that are going to be there this year to help. those are the deep fried guys. those are the tim allen -- >> the deep fried guys have to call the fire department. >> supposedly it is pretty good. there's a lot of ways to cook a turkey. >> there are. there are a lot of ways. you can put all the sea salt in it, put it in a slow cooker. you can do the turducken and fry it up. >> boneless. >> that's right. >> we're going to go over all that stuff. and it never gets old for us. >> no. but i'm wondering whether we can talk to the guys the first time around. 84% of men are involved in a holiday meal. 42% are involved in the turkey. well done, gentlemen. >> i'd still rather talk to that lady, though. >> you like her. >> she's so earnest. no matter what you say to her,
6:31 am
she answers you seriously. does she get some of the stuff -- >> i think she gets some pretty basic questions on the phone line. that's why she's really for anything and everything. i think she looked at it is there is no such thing as a stupid question. we have tried to test her. in even when we try, she takes us seriously. >> no question is dumb. >> no, that's right. when we come back, guys, we're going to talk about what the global markets need to know about this week's headlines from this week's communist conference in china. andrew will join us live next hour. among his guests, the winkelvoss twins. first, as we thoed a break, here are yesterday's winners and losers.
6:32 am
6:33 am
6:34 am
6:35 am
good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew is in new york today. preparing for the deal book conference. he'll join us in the next hour. as a headliner, you can catch it right here on "squawk box." sitting in, we have jpmorgan's
6:36 am
equity strategist, tom lee. a lot of people writing in, i don't look at e-mail any more, i look at twitter. aerosmith, tom petty. >> american band's greatest -- >> it's a long way, any of these bands from the beetatles, the stones, the who, pink floyd. what happened over here? what's in the water over there? led zeppelin. it's a long way from our bed best to -- >> maybe we have a broader list, but not as deep. >> i don't think we have anything close. your husband could say kansas. >> he looks kansas. the drummer has been here with us on set. >> andrew messaged me. he said hands down justin bieber is the greatest -- >> i disagree with that. >> he did not. >> try and picture him 30 years from now. >> ow, it was power ross soshg yib. >> what's that? >> 30 years from now, do you think people are going to be
6:37 am
watching -- >> that's a good question. >> here in the united states, we have individuals, you have madonna, cher, jimi hendrix. we celebrate individualism here. elvis. >> did they play hotel california? >> they did. that was their encore. >> with the two guys playing? >> yeah spp it's not one of the original eagles that did the guitar. >> but it's no done henley? >> no. they did like one joe walsh song. >> all right. >> i'm trying to think of a holen john type of partnership. >> brewer and shipley. >> who? >> making headlines, president obama -- jimmy buffett. people love him. they're parrot heads. >> but you're not thinking of bands, you're thinking of individuals. springsteen, john mellencamp. >> did you see lady gaga? >> i did not.
6:38 am
>> good. don't. >> president obama is nominating a top treasury department official to run the cftc. our buddy, bert, bart. timothy massad is expected to use the nomination to fully fund the cftc. but yeah, he's out. bart. and we go from feast to famine. did you see the guy we're getting? he doesn't have the long, flowing blond hair. yeah. he looks like a nice guy. >> we'll have to get to know him. >> you have to be tough to run the cftc. they're commodity guys, right? >> it's a rough and tumble market. the ruling party in china unveiling its performance for the next decade today. eunice yoon joins us from beijing with the highlights. >> hey, guys. people here are wondering if this moment is going to go down
6:39 am
as one of the most important in china's economic history. basically, the chinese president xi jinping got together with a couple hundred padres behind closed doors and pressed out a blueprint for economic reform. the whole idea of it is to find a way for china to embrace a new economic model where they're not relyinging on investment and instead are relying on consumption. there was a lot of interesting stuff that came out of meeting. first of all, they said that the market would play a decisive role in allocating resources. in the past, out of these meetings, the government said the market would play a basic role in allocating resources. people here are seeing that as an upgrade and commitment to reform because they use the word decisive. also they made a commitment saying there was an actual target. they want to see decisive results by 2020. all of that is encouraging to
6:40 am
people who believe china is on the verge of opening up. there is interesting investment opportunities. one was that the government said it would relax investment controls and said it would promote more free trade zone development. the final thing that was interesting was the fact that the government said it was going to push ahead with social security and pension system reforms as well as grant more property rights to farmers. and those are seen as pro consumption policies. because at the end of the day, it means there's going to be more money in the pockets of farmers as well as migrant workers. so, again, a lot of interesting discussion and information coming out of this meeting. the big question, though, that people had is what is all of this going to look off paper? guys. >> okay. okay, eunice, we appreciate that. i don't think we'll see you again, but thank you for that
6:41 am
report. i'm looking through here. bruce springsteen. >> that's a good one. we said that a second ago. >> we did? >> beach boys. >> that's good. >> the birds. my wife might say van halen. metallica, number five. >> are you looking at records, all-time records? >> no. i'm looking at some different people saying some different things. aerosmith. nirvana. that's what depressed me. it's just too grungy and depressi depressing. coming up, institutional investors unveiling its rankings of the 40 most influential people. you see? we can either do bands or the most influential people in the world of pension funds. >> there's some good one owes there. we know this list. >> aerosmith? >> no. on the pension funds. >> find out who made the cuts when we return.
6:42 am
6:43 am
6:44 am
6:45 am
welcome back. institutional investor is releasing its inaugural rankings today. this pinpoints the 40 most powerful players in the future of u.s. pensions. joining us right now is michael pelps. mike, this is incredibly important because we look at pensions, we know that there's a looming battle over this when you see what's happened with detroit. and i guess if you try and add it all up, how bad of shape are our pensions in at this point? how underfunded are they? >> it's pretty scare if you look at the pension crisis we face right now. and in particular, we looked at the defined benefits.
6:46 am
the pensions, traditional pensions which represent about $7 trillion. and, you know, the underfunding on the public side, that includes both publics and corporates. the underfunding on the public side is estimated as high at $4 trillion. so you look at, you know, the fiscal problems, the budget problems that municipalities and states are facing. it's clear that, you know, solving the pension and this pension problem is of paramount importance to them. >> that's probably why the top two names on your pension list include randy wine garten and rahm emanuel who as mayor of chicago is locked in a battle at this point. which side do you think comes out on top? >> well, they've been facing off back in the spring rahm emanuel announced that they were shutting down 50 schools in chicago as part of the -- trying to solve the budget problems there. and randy wine garten came out
6:47 am
vocally on the opposite side trying to protect those jobs. who is going to win? i mean, those schools shut down. so i mean, clearly the fiscal burden is, you know, outweighing whatever moral imperative there might be. >> defined pensions are going away in corporate america. and have been threatened on the public fund, too. i mean, i -- >> for sure, for sure. >> we've gone to a 401(k) here. >> if you look back in 1990, there was something like 113,000 defined benefit plans in the united states. now, as of a couple of years ago, it was down to 45,000 and shrinking. >> if you even make that promise, because we have something from our own employer. >> yeah. at ge we had a pension. here they started one, they froze it a year ago and now they're phasing it out in favor of a 401(k). >> are you kidding me? you're going to give me that? and then if i died, does my wife get it? >> there's a way, you make choices that you can take less of a pension, the smaller amount is that your wife will take it
6:48 am
forever. >> it's the same. it makes so much more sense to have a defined contribution. >> it's great for the people for the retiring -- out there, but the problem is that they're on the taxpayer or on the corporate corporation. >> from 20% to zero and you have a plan for how much you pay out as a personal of 95? >> what we found when putting together this ranking, we were looking at the 40 people who are going to have the most influence on shaping this debate, there's been a lot of focus on coming one a hybrid solution that takes some of the best qualities of the traditional defined benefit plan and incorporates that with defined contribution plan where employers and employees are actually putting in money. because one of the biggest problems with the -- and this is actually what randy winegarten is concerned about with teachers with the 401(k) plan or the defined contribution plan, the onus is put on the workers to
6:49 am
actually make the investment decisions. >> right. >> and they're not qualified. >> although you could say this is a change in essential -- with promises that have been made for decades. but we're looking at this and realizing it's going to be very tough to figure out on both ends. we're going to wind up with an american population that is unable to care for itself down the road or are we making smart decisions now that put us in a position to do that? >> that's what we're looking at. >> larry is one of the names on your list. he's talked an awful lot about it. >> larry talks about requirements being the major crisis that we face. and he's looking to put in place a mandatory retirement plan that individuals are forced to actually, you know, make contributions. >> you know, if we're going to force people to buy health care, this is even more important. people should buy their own health care and be responsible for their own -- you know, for their own health.
6:50 am
that's why bloomberg thinks he has to watch every single thing i do and -- you know, from breakfast, lunch, dinner -- >> he's going to be paying -- >> but no, i don't want you worrying about me, mayor. thanks. you handle your own stuff. >> but the problem if you were in charge of your own health care a -- >> changing the structure is a lot of things people can do obama care needs to be changed so you can shop around as a consumer. you go to the doctor now, you have no idea what it costs for any procedure. if the government didn't take it upon itself to decide, you know that it was gonna have to pay for everything that goes wrong with me then they wouldn't be dictating -- >> the problem you is probably look at it a little differently than you did when you were 20. when you are 20, you think you're invincible. >> i still think that. >> but once you have kids -- >> i'm not though, 'cause i can't walk up steps anymore. >> once you have kids it changes
6:51 am
your outlook. >> it does. but i just think we've gotten away from a lot of individual responsibility lately. >> i don't think it is individual responsibility but they are going to force to you take that individual responsibility. >> that is even better than the nanny state, which nobody wants. >> mike, thank you very much for coming in today. >> a pleasure becky. >> we will check out that list again, institutional investor, 40 pension names. >> on our website you institutional investor.com. >> thank you. coming up, 11, 12, 13 trivia. here's a hint, get married, right? days like this. see what we're playing now. okay. a little "hotel california." i requested some stuff. >> wait a second, playing this to go along with getting married, "you can check in but you never leave." >> and you need a lot of alcohol and drugs and stuff. did you know it was on baja, california, a place in mexico where guys went where they did drugs? >> i did not know that.
6:52 am
>> um, plus, we are going to play some iron maiden for your husband who says -- he says that is the greatest band of all time. >> no he didn't. >> kind of thinks that though. >> he doesn't. >> still play -- kansas, still play to huge crowd us in chile. >> and europe, too. >> europe. plus, we will get to our coverage of -- the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪
6:53 am
mine was earned orbiting the moon in 1971.
6:54 am
afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
6:55 am
6:56 am
welcome back, everybody. tuesday is not usually a popular day of the week to say "i do" but today happens to mark 11/12/13 on the calendar and that makes it a highly desirable wedding date for thousands of brides. according to a study conducted by david's bridal 3300 brides will marry today, an increase of about 800% from a year ago. the study also found that 40% of brides would consider planning their big day on a special calendar date in particular. here is the ceo of men's warehouse. >> every time there is an american ano, ma'am loin the calendar we see that shift the wedding business. for example, whenever the 13th day of a month falls on a saturday, weddings fall off. when the calendar said 9/10/11 it was one of the biggest days. when the calendar said 7/7/7, one of the biggest wedding days we ever experienced. >> hoping for a lucky date for your nuptials, keep in mind only one calendar date this century
6:57 am
comp brides of three sequential numbers, 12/13/14, get ready for it falls on a saturday, get your bookings in now. andrew joins us live from the conference. among our guests, we have the winklevoss twins. welcome back. how is everything?
6:58 am
there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
6:59 am
7:00 am
opportunities for tomorrow, the best and brightest investors speaking throughout the day. and this day, the winklevoss twins on the next big opportunity and the next hour, iac and expedia chairman, barry diller. plus, we take a ride with the ceo of cedar fair entertainment.
7:01 am
with the stock near all-time highs, all fun at the company's theme parks but can they keep consumers and investors lined up for more. a special report on why mexico maybe the next hotspot for auto production. the second hour of "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" on cnbc. andrew is in new york this morning at the deal book conference. going to hear from him in just a minute. the mean time, the futures morning have been getting a little weaker. stock futures down 25 points below fair value and s & p down by four points. a u.s. aircraft carrier is headed to the philippines to aid in the efforts following last week's deadly typhoon that is
7:02 am
estimated to kill 10,000 people. uss washington will arrive in a few days a report in a few minutes. am and samsung are back in court in their ongoing patent dispute. it will determine how much samsung has to pay for infringing on apple patterns in old tab let's. walmart will introduce new deals throughout the night and into the next day 6 p.m. thanksgiving night it is the latest to announce a thanksgiving night opening as competition for holiday season shoppers heats up. joe? get to andrew, finally. at the deal book conference. see how this shot looks. oh, he's got his jacket on. >> how does look? >> got the jacket on. >> thank you. thank you very much. we are live. what's that? >> much shorter commute. did you walk? >> much shorter commute. i it is raining outside. i did not walk. i did not walk. we are live from you the new
7:03 am
york times for the deal book opportunities for tomorrow. one of our panels today is focussing on what's next for the fed and what it means for the economy and joining us now to talk about it, austin goals bay panelist for us later, university of chicago school of business, professor of economics, also, of course, former chairman of the council of economic advisers and a good friend of "squawk's." tom lee, u.s. equity strategist at jpmorgan in the studio. is there a piece out this morning in "fortune" by mohammed al arian, because of last week's numbers, we are not going to taper, at least not yet. choose make sense? >> i don't know that i agree with that, you know? but i nomo hammed me, as does you you's good guy, i respect his opinion. but i think the fed announced, as we were going into the fall, they wanted to start some taper to show they were committed to exit strategy and the conditions did not suffice to let them do that.
7:04 am
with great uncertainty for the market. and now, i thank you lot of fowlkes at the fed are going to look and say, at least in the short run, we went through the shut down, the jobs numbers were better than they thought, the gdp better than we thought, i think they start it. >> they start it when? >> i think at the next meeting. going to be a heavy -- 50% chance they do at the next meeting, probably coupled with something about the longer guidance. >> while mr. bernanke is still around? >> that's what i think. >> tom, where are you on this? nch>> one of the issues for the fed, no toward retain credibility, if is going to look awkward to reverse it bart is pretty high for them to convinced of the need to start tapering. i think they will wait for a more data. >> your thesis on the market
7:05 am
exthings are looking good, how much is that dependent on them not tape earthquake? >> you know, i think in a way, fed action on tapering really depends on whether the market is perceiving the fed is leaving or lagging. you know, i think if the data strengthens and starting to see yields creep up, i actually don't think tapering itself is going to help equities. as we saw earlier in 2013, when the fed was kind of surprise the markets, it was causing turbulence. i think it really depends. >> my only addendum that i would say is we're going to get one more jobs numbers before their meeting. if that number is extreme in either way, i think it would decide the case. what i'm saying is let's say the number's basically about what this last one was. >> real quick, take us inn side the beltway for one second. we have this conversation constantly on the set about whether bernanke needs to begin
7:06 am
this before he leaves for some kind of legacy or that yellen feels like she wants to start it or that there's some kind of dynamic that has much more do with personalities than it does the actual numbers, even though every fed president who comes on our set tries to suggest otherwise. what really happens? >> i bet in their heart of heart these do think about that. i think -- and i should say, i'm big fan of janet and i'm an old friend of ben. i think if everything else were equal, ben would like to get the taper started. i'm just hopeful -- i'm just hoping that janet's nomination does not get sucked into the debate about the budget and about -- >> of course it will. >> that would be really terrible. i think right now, there's still 60 votes that rand paul or others might say they want to put a hold on. i don't think it would work. anything could happen and if it does that would be terrible. >> tom, does that factor into
7:07 am
your thinking or does it matter at all? >> it does factor but again, it is a tricky time. i think the nominations, only one of the issues over the next few months, also looking at the continuing resolution and the debt ceiling debate. i think these are things that could be viewed as e eed eventse it tough to taper now. >> larry summers has gone on a sort of campaign, post not becoming the fed chairman, trying to push for conversations what he calls growth. keep saying just get democrats to talk about growth, it could change the conversation. one of the things i don't hear him talking about, the conversation about growth, is regulation or any of these others. but he also -- sort of stopped with the infrastructure conversation, too. i'm sort of unclear, he's your guy. what does he do? >> i agree with that message about growth and i've been
7:08 am
saying that for a long time. ultimately, for both the short and the long run. >> trying to thread a very clever needle. how do you have that conversation without getting at some of these very political hot buttons? >> that's pretty true. get everybody to agree it's about growth, i think it's inevitable what you're saying plied land on the table. okay, we are back to the same dispute what drives growth s it investing in education, infrastructure or is it deregulation and cut taxes? so i don't think ultimately there's really anyway to thread the needle. i kind of think we're back in the debate. but if -- if he is able to change the focus to be more growth oriented, i think that would be good because it would kind of counteract the let's just cut the deficit and cut government spending even faster than the record levels it's going down. i think that's what's motivating. >> now, one other political issue this morning. ben white, our good friend,
7:09 am
morning money beltway, beltway ben we call him. he says he took -- >> he know you call him that? >> of course he does. i don't. joe calls him that. >> i was just noting, there's a very high class of people over here, not sure they would let joe in. >> you going to come over later today? >> i don't want to be there. it's like washington, i don't want go down there either. >> yeah, there's a big security guy right here, he would not let you, joe. >> your friend, valerie jaret, going to be here. >> i love valerie. seen it on the air, i think. you have seen it. >> yep. there's a lot of chemistry. there's chemistry there, unlike with goolsbee, although i have a lot of chemistry with zandi. >> who is your favorite american band? superman or clark kent?
7:10 am
best american band, living or dead? >> doesn't matter. the door? >> i will go with chuck berry. >> okay. >> where did that come from? >> talking about it all morning, tom lee went to the eagles concert last night, out to midnight. he's little -- you know, he is okay, but he was out late. andrew, i spoke for you and said justin bieber probably. >> justin bieber, britney spears. how about hootie & the blowfish? >> i thought about darius. i did think about darius. he is country. phenomenal. >> who were the two singers in the '80s or '90s who lipsynched? >> milli vanilli. milli vanilli. >> to give back the grammy. they had to give back the -- >> sort of write land. >> before we let us aen go, this is the question, ben white -- yesterday talked on the sbhoet piece about elizabeth warren and
7:11 am
whether she could ever run for president. more importantly, it morning, everyone said maybe she runs but she loses, the whole thing seems crazy, however this piece this morning suggests that people in washington and nervous were nervous and anxious about this, that there was even a conversation and b that democratic strategists were suggesting inside your world that if you're hillary clinton or somebody that's more moderate, that even the prospect of somebody like elizabeth warren, bill de blasio being up, what is going on in this country could end up forcing a moderate democrat that some people on wall street have been supportive of to go more left. you buy that? >> if it started looking like somebody we are going to run from left, yes, i would buy that. but a, we are not even sure that hillary herself is going to run. and i don't think that the prospects of somebody might run might move anyone anywhere. i think it's pretty unlike --
7:12 am
feels pretty unlikely to me that if hillary ran that elizabeth warren would run, but that sounded a bit overboring. they -- the funny dynamic was the fear that elizabeth warren would come after them according to some leading wall street to give more money to hillary and by giving money to hillly, that would make elizabeth warren run. >> we have senator levin who this going to be at the conference just a little bit. saying some of these things as well. austin goals business thanks for coming n. >> appreciate it. >> the next half hour, we have winklevoss, talk aboabout bit c. talk about their investment. and barry dillerer. as the day progresses, you're going to be seeing ray dal yo and dan league, so, a big day here. >> carl levin there today?
7:13 am
>> i don't want to come down there >> valerie. >> you should come down. >> anyone -- just to balance things out at all, or are you balancing out for the -- >> i'm trying, as you can imagine, i'm trying to balance things out. as they say, you want to keep your enemies closer, right? >> that's true. >> new york. >> i have a seat waiting for you. >> you actually are fairly -- >> for becky, of course. >> fairly balanced for new york. you actually are sort of balanced, right? >> thank you. >> welcome. >> i try. my own little way. >> plenty more. >> thanks, andrew. good-bye, mr. zandi. no, mr. goals xbrichlt whatgool. we are going to talk theme parks, consumer. also what's bringing people through the gate to us cedar fair? the ceo on next. here is look at the best selling artists based on certification of units shipped in the u.s., according to the recording
7:14 am
industry association. lapp a lapp lop
7:15 am
7:16 am
cedar fair reported third quarter results and raised its outlook for the year as more people visited its amusement park. joining us, the ceo, the president and ceo of cedar.
7:17 am
do you play golf? >> i do play a little golf, not to the same extent fran since did. >> any relation at all? >> never found a relation. >> a great story. >> certainly s first non-uk guy elected. >> as an amateur. >> as amateur. i'm from cincinnati. remember when king's island was built? during my childhood. coney island. >> almost 40 years ago. 46r78g9s 0 years ago, it was built? what, a new roller coaster going on? >> king's island the longest inverted coaster in the world. think of like a ski lift as a roller coaster, right, called banshee and open next spring, part of the toys we get to play w >> you're saying it's good thing it's -- you're opening a long inverted roller coaster that is a positive? you get goat ride upside down longer than anywhere else? >> fortunately, the digital revolution hasn't figured out how to do that from your couch. you come out to king's island or cedar point and have that experience. >> a couple things there.
7:18 am
went there not too long ago with my family, a couple things i don't want to get on, the one where like you're on a bungee cord inside something? >> we had those devices. >> scared the -- just looking up at people, i got scared. >> part of the fun is the fact that there's a whole population that doesn't ride the coaster but wants to watch you ride the coaster. that is a good example you just ran. >> might be one. i'm always worried your going to be unloading me from the top of one of those things when it gets stuck up there. >> i wouldn't ma i wouldn't make it. >> doesn't happen very often. >> you said very often. >> one roller coaster 400 feet tall, designed if it doesn't make it over the top, that rolls back. an elite club if you have been on roll back on top a coaster, that is a badge of honor. >> played, the top of this hour, played some "despicable me," like to do that we are all supposed to be able to put that together, horrible song, put
7:19 am
that together to know it was roller coaster to know this guy was coming on. that is was the idea. anyway, you are able to -- people are spending more or more people are coming? >> a little bit of both. but here's what's happening. we hit our fourth record year in a row this year, on target to do that if we are able to do that in this economy, think about the last four years it says couple things about the product. one of the thing it is says, look, the world is overly complicated, give me a couple days' break with my family and friends, what i think is working. the consumer is asking to have fun, we are doing that pretty well. >> i assume you would have done well staycations, 2008, people couldn't afford to fly to florida or california or to leave the country but as the economy improves, do you worry that you lose some of those people who have been staying home and taking staycations? >> a great question. staycations started because of the economic constraint. i think what's happened is a whole generation has now discovered that the road trip is a good way to go on a family
7:20 am
vacation. think about it airfares are up you airports more complicated, et cetera, a whole generation that didn't do the road trip. i think when staycations are gone, fun cations will stay. >> an interesting theory. back in the '50s and '60s >> >> think about that a couple young kids, easier, jump notice car, control your own agenda, have fun. >> you watched when comcast bought nbc universal? >> i did. >> what was going on then that the valuations on theme parks changed overnight. did something happen with blackstone and within -- within six months, these things were five time what is they were before. >> the good news, guys like steve burke out there understand the value of a theme park business. no if you look at it from inside the industry, what happened was harry potter. i mean, universal fundmentally restructured the quality of their amusement park business by signing the licensing with harry porter, a phenomenal product. >> did they want at the beginning, do you think? the word is that they were going
7:21 am
to get rid of, now they love it, but like disney when they bought abc and ended up with espn. a little bit of surprise on the way, good for them. that's what we think. industries healthy. look at disney, the destination business, you're seeing things work, one of the few places you are seeing good things happen. >> what we like to say is having fun should be fun. again, i will go back to the point, the world is overly complicated. i think that whether it be us or whether it be the comcast folks, universal folks, et cetera, providing that reward working as hard as people are working -- >> you can't share pictures of your family on facebook at an amusement park unless you go to the amusement park. >> tough leave your basement at some point do something before -- >> it sounds a little trite. those are the memories you recall from the times in cincinnati, sandusky, et cetera, you can track back 40 years
7:22 am
pretty quick any your brain, think about the time your kid was tall enough to ride such and such a coaster. >> all right, thank you, francis. francis or matt? >> i'm matt. i wish i had his swing. i do not. >> great to see you. thanks. >> thank you. up next, we will get an update from the philippines as cleanup efforts ramp up ahead of another possible storm. and then nissan looking to mexico for a new production plant. phil lebeau tells us why this area could be the world's next auto hotspot. a little later today, elon muss look present at the deal book conference. cnbc is the exclusive broadcast partner for the event. brink are you the comments live at 4 p.m. today. "squawk box" will be right back. coming up, tyler around cameron winklevoss on their bit coin success. the entrepreneurs join andrew live from the conference in new york. later, chairman of iac, barry diller, on the media and more. welcome back. how is everything?
7:23 am
there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
7:24 am
[ male announcer ] introducing fedex one rate. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
7:25 am
good evening from manila, time the is 8:25 p.m., now the
7:26 am
fourth day after this very destructive super typhoon that struck the central and the eastern provinces of this country, claiming what we believe now to be up to 10,000 lives. what we do know is this, that the relief operations are ongoing, essential supplies of food, medicine, fresh water, sanitation products are not getting through in meaningful quantities to the people who really need them, that's because of the utter devastation that this typhoon has caused. the storm surge creating tsunami-like conditions, flooding roads, bringing down power cables and other essential logistical equipment and capability. so, that's really complicating you the task of the disaster relief agencies. what could help is the arrival of the uss george washington, currently on route from hong kong and we understand that it
7:27 am
will be arrive hearing by the end of week. also enroute from singapore is the hms daring. they carry with them much-needed aerial support, helicopters. that should help to give these relief operations a much-needed shot in the arm. that's the view from manila. back to you. >> all right. thank you again for the report, the second one we have had this morning, great work over there. coming up, much more from the deal book conference. check out the futures at this hour after the dow closed at another high yesterday. coming up next, phil lebeau, phil lebeau. >> it is the newest auto plant in the world, so, why is it here in mexico and not in the united states? that story coming up on "squawk box." tresse go to a mat tresse go to a mat store and essentially they
7:28 am
just get sold something. we provide the exact individualization that your body needs. before you invest in a mattress, discover the bed clinically proven to improve sleep quality. the sleep number bed. once you experience it, there's no going back. final days for our lowest price ever on c4 queen mattress sets-just $1299. plus special financing until 2015. only at one of our 425 sleep number stores nationwide. sleep number. comfort individualized at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has.
7:29 am
investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon.
7:30 am
welcome back to "squawk box" on cnbc. i'm andrew ross sorkin, tell at the deal book conference in new york city. in a bit, talk about bit coin with the winklevoss twins. we have your morning headlines,
7:31 am
up to date on the big ones being this. nrg energy buys mission energy, 2.6 billion cash and stock deal, it is a unit of publicly traded edison international and operates, we should say coal, wind and gas facilities in 2008. sought bankruptcy protection last december. the u.s. is going to be passing saudi arabia and russia to become the world's top oil producers by 2016 according to international energy agency it is temporary once oil fields in texas and oklahoma move past the prime producing years, big issue out there in energy land. google's motorola unit expected to unveil a lower cost phone this week, according to wall street this morning. follows weak sales for the company's flag ship motto x models, i wanted to try one of those. the motto g will be introduced art an event in brazil come on
7:32 am
wednesday. the news for now. becky, back to you. >> thank you. a perfect storm of factors made mexico one of the most attractive places to invest in the world to locate a new plant, why nissan is making the move. our phil lebeau is live in mexico with more on this. phil, good morning. >> good morning, becky, here at the new nissan plant, the second in this city this shows the kind of growth we are seeing in mexico when it comes to auto production, mainly for exports. take a look at the growth. not long ago, seen a million vehicles born in export out of next, who do year, 3 million. by 2017 it will be 4 million vehicles. mexico is now the eighth largest auto manufacturer, as far as a country, in the world, and quickly moving up the list, it will be in the top four by the end of this decade. this country is seeing an investment of $10 billion in new plants here coming in from mazda, honda, nissan, where we
7:33 am
are at, audi and all because of the central location, low wages and perfect setup for exporting cars. >> mexico is really the crossroads of trade for the western hemisphere, if you think about it they have trade agreements with 44 countries. they are able to trade without tariffs, with the eu, with certainly the u.s. and canada. they have got an agreement with brazil. so, they are really at a crossroads of being able to build vehicles and export them pretty readily you pretty quickly. >> who are the leading exporters of automobile us in this country? nissan leads the way, almost 700,000 vehicles will be built here, 90% of them exported followed by vw hand general motors and why are we here at this opening? because we are going to have a chance to talk with ceo carlos go on "squawk on the street," a little after 10:30. you down the want to miss this interview, talking to him not only about the growth here in mexico but les about some interesting teases for a
7:34 am
potential new product similar to google glass that nissan may be be showing at the tokyo auto show. that is on "squawk on the street." >> phil, thank you. i guess a lot of this has to do with the new administration in mexico, too, which seems to be very open to any sort of trade and getting foreign investments to come to the country, too. >> direct foreign investment has exploded in the country, particularly in the last year, and the auto industry, this is the hottest place in the world in terms of adding new capacity. >> say it one more time for us, phil it is aquas caliente? >> aquas cal lenitys. hot waters. >> we like t all right. watching you throughout the day phil lebeau. when we come back, the winklevoss twins join andrew at the deal book conference taking place in the city. 8:10 this morning, barry diller
7:35 am
will be presenting. cnbcs exclusive broadcast partner of the event, his remarks live right here on "squawk". the 10:00 hour, hear from dan lowe. "squawk box" will be right back. i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you.
7:36 am
at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there. customer erin swenson ordebut they didn't fit.line customer's not happy, i'm not happy. sales go down, i'm not happy. merch comes back, i'm not happy. use ups. they make returns easy. unhappy customer becomes happy customer. then, repeat customer. easy returns, i'm happy. repeat customers, i'm happy. sales go up, i'm happy. i ordered another pair. i'm happy. (both) i'm happy. i'm happy. happy. happy. happy. happy. happy happy. i love logistics.
7:37 am
but it sure feels that way. because with power ports... and wi-fi... and in-seat entertainment, for everyone on board, now when you fly, time flies too. (flight attendant) sir, we're about to land. (vo) we're adding a brand new plane, with all this, every week. it's just one way we're building the new american.
7:38 am
a live shot of times square on a rainy day. named after the "new york times" and we are reporting live from the new york timings this morning, the deal book opportunities for tomorrow conference our next gechess this morning, the high-profile backers of the digital currency, bit coin, tyler and cameron winklevoss, principals at winklevoss capital, also famous for facebook, of course, but this morning, we are talking about bit coin. i want you to help me. despite all we have read about bit coin and hear about built coin, i think most people, including myself, don't really understand what the heck it is and how i could possibly even get a -- really get a bit coin. >> right. so the -- yeah that is a
7:39 am
difficulty right now. a lot of people want to get bit coin it is difficult. tough go to exchanges that are overseas in a lot of different ways. but a bit coin is basically digital currency, a stored value. effectively, a public ledger that records the ownership of coins. >> you bought these in the single digits, now worth over $300 each. the reports i have seen say you put in $11 million and now maybe over 40. maybe it's more, maybe it's less. but who makes the bit coins? this is the part i don't really gil get and i don't think anybody gets. >> right. so, there's miners mint bit coins about every ten minutes and basically computer algorithm. >> can i mine a bit coin if i want to? >> you could. at this point the sort of computers blot mine are so specific you couldn't do it as a hobbyist. >> who do i have to call to get a bit coin? >> you have to go to be a exchange. >> which exchange?
7:40 am
>> you can do it in coin base, mount gots, ach or base account. >> this an entire gamble basically that the dollar is going to fall to zero? is this basically -- like a gold bid? >> some people view it as gold, 2.0. and also the technology aspect of just the idea that payments are going to increasingly use a network like the bit coin. now we are up to move money around the globe. but in terms of a stored value, it definitely has the properties of gold and people are viewing it that way. >> but properties of gold, tough mine them. so, that's why people think of it, but mine them digitally, mine as many as you want. >> there will never be more than 21 million bit coins. >> who decided that? to ho is the ben bernanke, of bit coin? >> atoshi yakka motto, the anonymous creator. >> you don't know him? >> don't need to know him. it is based on cryptographics
7:41 am
and cripping tography and not trusting an individual. >> your sense, you have clearly made it a big investment, trying to pursue an etf. where does that stand right now? >> so we filed an amended s-1 in october and we are just still going through the process. >> and how long does that process take? we know what the -- >> we don't have a crystal ball. >> s.e.c. knows. >> it's moving. it's moving along. >> and let me ask you the flip side of this, the criticism of bit coin, beyond the if a act that nobody knows who created it and nobody knows really about it all, the criticism that regulate terse step in and say we can't track this currency, used on places like silk road, just shut down for illicit goods, because you can't track it makes it more attractive for that part. >> so you can actually track it. silk road, the price is double it was before silk road shut down. deet manned for bit coin to use
7:42 am
for illicit activity was clearly almost zero. >> so your sense though of the regulators right now, i assume you have been to washington, conversations. we are going to have senator levin, be here at the conference later around i hope that we have a question about that. there is going to be other people here who i imagine may talk about some of these issues. >> sure. i think like what the discussions that we've had, i think everybody recognizes the innovation and doesn't want to stifle it just want to make sure there's healthy regulations, used in a safe and productive manner. >> the risk for, the price it is today, choose even make sense to you? i mean, i don't even know what you're benchmarking it against. >> small vol cation is 400 billion market cap. >> $400 billion, with a b, market cap? >> the market cap around $4 billion right now. it doesn't make sense in the sense that it should be 100 times more. >> should 1b 00 times more? your sense is that the next time i go the next time guy on amazon or the next time i buy something
7:43 am
on -- >> shop any accepted it. >> see merchants and by do accepted it. it's happening. i think the next six months, tremendous growth in the infrastructure and merchants accepting it. >> huge volatility in the value of bit coin, therefore, i assume if you were a consumer, it's a very dangerous play to be sitting around with a pot of the stuff thinking you were going to go buy prod dungs that you need on a weekly, monthly or whatever basis. >> certainly early with the volatility comes 2,000% return on the asset class this year. it's young, but over time, as it gets bigger and more mature, you will see the volatility decrease. >> read that number of fed presidents come on "squawk box" and most, i admit, write the whole thing off. >> that creates the opportunity
7:44 am
for guys lining us. people don't see the opportunity and people who study it do. people who actually know what is going on. >> what is the potential there is going to be competitors to bit coin and what does that mean? meaning we going to be living in a world there's several different types of currency? >> it's very possible. i think everyone agrees, most people agree that virtual currencies are here to stay, bit coin the ultimate win, it is very possible. bit coin has five years of first mover advantage and entrenched user base. >> the networks effects of money are so great, is probably a winner-take-all scenario. there are alternative coins, all coins already, they exist. bit coin is right now the clear runaway winner. >> how -- how far -- i mean, a year from now, two years from now, i'm going to see it everywhere? show me the -- what's the timeline look like? >> it is going to be fast, if it sort of fulfills a promise it will probably be faster than anybody expects. we see that with technology as a
7:45 am
whole, the adoption curve steeper and steeper. i think the next two years it will be a completely different landscape, just like the internet, like '98, 2000, 2001, a different game. >> becky back in hq, a question for you. >> andrew, thanks. gentlemen, i know i'm not the earliest adopter of things, i have a lot of skepticism about this idea. i realize the s.e.c. is looking at this if the s.e.c. doesn't approve these plans, i guess my question is there a point that you would sell out? and trade your bit coin in for dollars? >> i mean, i think that right now you we are long-term goals and i think we will remain so for a long time. >> the s.e.c. whether or not they approve an etf does not -- >> like cameron said earlier, the fact that china send on the largest search engine that china will let bit coin flourish n china alone, 300 million --
7:46 am
there's more snow, china than there are people in america f bit coin flourishes in china alone it is going to be pretty big. >> your sense that governments everywhere are going to approve this or we are going to come, situation where certain countries say, you know what, no. no thanks. >> seeing countries like germany. >> said no? >> said it is okay. >> germany said it was okay. >> it happened. >> the only -- so belgium, finance minister said it is totally fine. canada is not going to regulate it now. the only country where it was misinterpreted was thailand but it was a mistranslation, basically said, we don't know how to deal with this right now, we have got to look into it. some people erroneously reported they banned the bit coin, but it is not the case. >> you walked into larry summers' office tomorrow with this idea, what do you think he would say? >> probably wouldn't get it. >> thank you for being here. >> thank you. >> maybe you should buy philip morris instead of bit coin. >> philip morris, maybe. maybe could i buy philip morris with bit coins.
7:47 am
how about that? >> eventually. >> you know if i mentioned 300 million smokers just to buy bit coin. it seems like -- i thought why don't you buy phillip -- i don't know, that is just me, just a comment. anyway, thanks, guys. >> back to you guys. >> andrew, thank you. we will continue to go back to andrew in a little bit this morning. also coming up what tom lee is expecting in 2014 some stock ideas and market stalk right after this. plus, in the next hour, barry diller live from the deal book conference. later, groupon chairman on the twitter ipo and much more. squang box will be right back. bny mellon combines investment management & investment servicing,
7:48 am
giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.
7:49 am
7:50 am
♪ >> dulcet tones. >> i'm too old to go on the show. >> you know what, you're awesome. >> she had this sort of -- you know, on "american idol" learning that to smile just about whatever they heard.
7:51 am
it was kind of the same smile i saw, although he is good. good luck puppies, his band is pretty -- is famous. >> think she was sincere. >> i saw it live. >> not the mud puppies. it's the what -- >> i call them the muckrakers. >> muckraker. anyway, we got all kinds of -- people are, you know, they are interested in business news for sure, but also, they write in more about this, don't they? i don't know, lou reed, i think that's sort of a tribute, people writing in. talk about aerosmith we are in new jersey, got to mention the boss and bon jovi. that's your husband with kiss. journey, you know, i don't know. but -- >> they did play out. >> one thing that strikes me is nobody -- i mean, think about the beatles, because there's just unquestionable, those two guys, mccartney and lennon. and george, of course, and ring goes, obviously, the song
7:52 am
writing duo, they have 200 one-hit wonders. they could fund 200 bands to have a one-hit wonder. >> they used to do them. they would write a song in the morning go out to lunch, come back and write another song is in the afternoon. >> we talk about the album progression to sergeant person, a lot of that is technically as good as the stuff -- it's amazing. anyway -- >> tom lee is our guest host. the reason then tire conversation started -- the eagles last night i driving a conversation about what the best american band is. there's a great variety in america and i think that's what we've learned this morning, too. >> yes. and i -- >> go ahead. >> music's important, right we hear it and put ourselves in that time we first heard it >> that's right. it's like a -- and then there's been songs written recently talk about that where a song or a smell, honeysuckle. >> orange blossoms, reminds me of going to disney world with my parents as a kid. >> they said in my ear, remember
7:53 am
we played the john lennon that yoko song? >> see, that's -- >> the greatest bond of all time. >> and then paul went with linda. >> and they both sort of -- >> powerful. >> they usually do a lot of good. >> but in this case -- >> behind every good man. >> successful woman? >> successful man, good woman. i don't know. get bass backe to our guest host the outlook on the market. tom lee is the chief u.s. equity strategist at jpmorgan. talked about your target, 1775. the s & p, 1771. right at your target now the biggest question has to be what makes you nervous and how do you decide whether you raise that target or pull it back? >> yeah. i mean, at the moment, we are slow buyers, meaning, you know, i think it's tough to kind of say the market's gonna jump another 10% from here. >> but you would still be allocating money into stocks? >> that's right.
7:54 am
correct. i think i would just be looking at things with reasonable pes, where earnings for visions were positive. in the fourth quart, a good strategy to buy companies that raise estimates, the beginning of the quarter. >> you mentioned technology is one of the places that you think could you see some big gains and some of those stocks, particularly some of the megatechnology names, an ibm, cisco, microsoft, who am i forgetting? oracle. >> the largest market caps, it would be those names, emc, even hp, you know, if you look at that megacap list it is low pe stocks that are kind of begging to rerate. >> outside of technology, what other sectors are in a position to actually see some gains? >> i think financials still look pretty attractive. i think part of it is this whole idea that that sector is going to rerate, regulatory burden sort of flatten out. then you've got the whole option value, if investment picks up, going to get a pretty big jump in loan growth.
7:55 am
>> okay. and beyond that i mean, when you look at what the fed is doing, if the taper comes, earlier this morning, austan goolsbee wouldn't be surprised, think that ben bernanke, would, given his druthers, start the taper f they did that in december, what happens to the stock, the stock market? >> you know, i'd still have to say, i think it creates volatility. i think anybody who's worried about it has to be prepared to buy that dip, because we know dips have to be bought. >> how big a dip? 2%, 3%, 5% or more? >> think all those numbers within the realm of possibility, even a 5% pullback is possible. i think tends up being head fake, the same way i think some of the weakness in cyclicals we have seen is a head fake. >> great. tom lee is our guest judge. we will have more from him in the next hour. when we come back, more from the deal book conference in new york including barry diller. take his remarks live, cnbc is the exclusive broadcaster of
7:56 am
this year's event. ted beyons says will be joining us. "squawk box" will be back. liking your flat rate shipping.y fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
7:57 am
[ male announcer ] introducing fedex one rate. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. ♪ ♪ so you can get out of your element. so you can explore a new frontier and a different discipline. get two times the points on travel and dining at restaurants from chase sapphire preferred. so you can be inspired by great food once again. chase sapphire preferred.
7:58 am
so you can. hey, buddy? oh, hey, flo. you want to see something cool? snapshot, from progressive. my insurance company told me not to talk to people like you. you always do what they tell you? no... try it, and see what your good driving can save you. you don't even have to switch. unless you're scared. i'm not scared, it's... you know we can still see you. no, you can't. pretty sure we can... try snapshot today -- no pressure.
7:59 am
plus, washington wizards owner ted leon sis will join us, his revolution growth fund is announcing a $40 million investment in it. shirts. a look at the holiday season's biggest box office draws with the ceo of i max. the third hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick, andrew ross sorkin is in new york, preparing for the "new york times" deal book conferences. andrew. and there's mr. diller. >> backstage. >> wow. backstage. there's sam. sam wright.
8:00 am
we will be joined by andrew and his special guest, iac chairman, don't call it yaki, barry girl, hates that our guest host, tom lee, chief equity strategist at jpmorgan. still ahead, becky has your morning headlines. the u.n.'s humanitarian chief says the philippines needs almost a third of a billion dollars in aid to help thousands hit by typhoon highian. the philippine president declared a national state of calamity. foreign aid has been pouring in but infrastructure damage has slowed relief efforts. the united states is sending the uss george washington to help with the recovery. the aircraft carrier should arrive in the philippines in two days. walmart is the latest retailer to announce it is going to be opening earlier on thanksgiving day. black friday sales will begin at 6 p.m. on thanksgiving day, two hours earlier than last year. the retailer is also bringing back what it calls a one-hour guarantee this year. they are expanding from three guaranteed items to 21
8:01 am
guaranteed items, mean it is you're in line between 6 and 7 p.m. on thanksgiving, you are guaranteed the door buster item as a way to try to prevent any stamp pieced. the white house due to release national obama care numbers this week. "the wall street journal" reporting that fewer than 50,000 americans have been able to sign up for our new health insurance plans through the trouble-plagued health care.com -- healthcare.gov website. numbers fall far short of government execations. nearly 500,000 signups in the month of october. get a check on the markets this morning, yesterday, after the dow closed after another record level, it opened down by 21 points, s & p off by 3 points. >> okay. a mild trading day yesterday on wall street, not a whole lot of action or volatility, the dow did extend the record run by a small margin. joining us is alec young, global equity strategist at s & p capital. our guest host continues to be tom lee, chief executive strategist at jpmorgan still
8:02 am
with us. twitter was last week and we were seeing your tweets yesterday, 'cause this is a big deal for you to be on here with us this morning. you retweeted -- the question you were posing for your tweet is what -- can we withstand tapering? >> since the payroll report came out, up until friday, whatever we saw on the economic strength, this knee-jerk selling, good news is bad news, it brings for the taper. friday, we had that reaction initially in the morning. >> thoughts on the show that morning? i plained about it and talked to crime ber it juvenile, addicts should not be running the show when they sell off 200 -- nice upside surprise. that's one of the problems with qe. you got to get it out of the way before you can embrace good news. >> one of the reasons the market had troubles with it the recovery so lousy. now a report there's enough traction we can handle.
8:03 am
after all, still going to be stimulus, just a little bit less. the way it lines up, if that theory holds, is stocks -- stocks are good, bonds are bad. >> they got to decouple. >> we are starting to see that the great rotation, slowly gathering steam. the one problem with equities globally, the consensus is looking for big earnings acceleration last year, a lot is already baked in the cake. single digit bulls, looking for 1895 in 12 months on the s & p. a heck of a lot less upside giveth year. given you are probably going to lose money in bonds, equities the place to be. >> calling the direction in this business even alone is hard enough. you are saying we consol late the 25% cane gains that we've made this year and then we add another -- you're saying -- >> more volatility. >> 1895, if you knew we were going to close out 2014 at 1895, you might take that.
8:04 am
>> we would. >> look at alternatives, inflation, erode your money in cash, at best, break even, making 3%, bonds loosely in price you lose 3% in the aggregate. >> rather have 2200. >> i think a lot of people would. 35, 3535. >> we are haircutting consensus estimates of $121 of the s & p next year, if consensus is right, it thank maybe stretching it. firm russ at 2,000 next year. we could be way low, the problem is if you look at consensus estimates this time of year, they always come down a year ago, earnings up 10%. >> 5 and a half. >> market likes to make as many people wrong as it can. let's look at how most people think. how would the markets surprise most people? by going lower or 22? >> that's just where we see it in a year, the path is probably -- >> the public getting more involved, maybe things cool off,
8:05 am
one thing's for sure, only up 7 or 8% the next year, have a lot more chop, probably our first 10% correction since 2011. we have had pull backs, haven't had a full-blown correction, i think you have toer going, have to deal with the whole taper situation. we have got yellen. more tan general shally, the popularity of bit coin what does that say about the future prospects of the dollar. >> you serious? >> yeah. this stuff is going through the -- i think there's a constituency of people that want an alternative. the question does that group get bigger or smaller over time? central banks, don't forget, sell gold. gold could be doing better if some of the british and the swiss and, big central banks are dumping gold. i think, you know, that's an interesting theme. >> reserve currency. >> the bit coin, we had the winklevoss twins earlier, talking about bit coin as a reserve currency. >> it's easy to mock that thing
8:06 am
but you know, it's working. >> it's working very well. >> do you money in bit coin? >>. i don't part is why i enjoyed the interview august a lot of us are interested, need to get our arms around it those guys are looking to make that easier. maybe one day i will. >> it is an incredibly volatile marketplace, seems like it is almost pure speculation. >> negative view of policymakers in the united states would be the only reason would you think about the need for a different reserve kur rehn shane the dollar. i have full faith and confidence we are going to be able to maintain our status, the leading economy in the world and therefore, a dollar will be the do you have any doubts five, ten years from now the dollar will be the lead currency in the world? >> very comfortable keeping dollars in my wallet. idea i think about having bit coin in five or ten years. >> not so much that -- looking for an alternative to the dollar. >> it wouldn't be -- it wouldn't be the euro. wouldn't be another currency.
8:07 am
more a real story. you just have to ask yourself what's behind the dollar. i think you guys have peter schiff on later in the day. he can elaborate on that. but when you talk about ex-only nous risk, is it something we need to worry about the next 12 months? probably not. >> there is something about being the best house in a bad neighborhood, too. i mean, where else? >> right. and that's the wildcard. but just a question, how long can you sustain that? >> you have those concerns, one thing to have the concerns, another to invest that way? anything you have done, you have changed in your port folio, adding gold, doing something else to shore it up? >> one thing that changed in the last decade, few people sold any
8:08 am
gold, now the consensus is gold deserves a low single digit allocation in most portfolios that's one shift. >> alec, thank you very much. we are following the deal book conference today. in fact, right now, wasn't to get back to the deal book conference in new york city where andrew is speaking to iac chairman, barry dealer. >> -- business. here is where i want to start. >> okay. >> last year, exactly at this time, we did this conference, the man who was sitting in your seat to lead off this conference was a man named jamie dimon, jpmorgan, i believe you're a client of jpmorgan. >> yes, i am. >> you are? >> i'm happy client. >> a happy client of jpmorgan. and you said -- you stayed this to me, we have a conversation, i don't know if you remember this four, five months ago, when there was a debate about whether jamie should be -- should split his role between chairman and ceo. and you said back then that he shouldn't split it and you said this isn't about good could have verne nance it is about busy bod quotes a clue trying to do the dumbest thing, slapping and
8:09 am
shaving a superb ceo over utterly no practical reason that's what you said then. we are now $13 billion later. >> ditto. >> ditto? what do you think is going on? you are not only at iac and ex-speed ya, on the board of coca-cola, on the board of "washington post" f you were a board member who have jpmorgan today what do you make of what's happening here? >> i actually think they have handled this quite well. i think they have admitted to issues, you can't run a business like that without having all sorts of issues. you can't be induced to buying two banks in the great problem years and be responsible for their practices during that you period as if it was the fault of your governance. that is that piece of that i'm not saying there aren't many things inside of an institution that big that once you find them
8:10 am
and fix them aren't there, but that, to me exit not an indictable crime. >> if you were on the board of jpmorgan -- >> i want to know about the $13 billion if it is 3 1 3 billion, why where it is going? if it is going, a relatively small portion to have goes to people who are actually harmed, but the vast majority of you it goes to the government. what is the point of taking money from shareholders and shipping it to the government for what purpose? >> okay. but hold on. let me just play devil's advocate. i have generally been supportive. >> nothing, go on. >> what did you say? >> nothing, go on. >> i am generally supportive of what i have seen at jp. here's the question. if you are the director of a company, when you lose $13 billion, whether you lose it for the right reasons or the wrong reasons or whether you think the government is horrible or not
8:11 am
shall -- >> yes. >> is there something that you have to change? >> think they have changed many things. i mean that is the thing that i think is impressive. what did they know, when did they know it and what did they do about it? and i think in every one of those cases, every one who is public, they did the correct thing. so i don't think -- and by the way, the fact that the government grabs you for $13 billion because of -- because of your own vulnerability, meaning that you probably can't stand to fight it, it isn't worth it to fight it. >> would you fight it? given what you're say, you have been very outspoken on this issue? >> i would have fought a lot of t i don't know enough to know if you could actually withstand it, but i probably would have tended. look, i have never settled a shareholder lawsuit, because most shareholders -- i have never been involved in a shareholder lawsuit where there were actual grounds.
8:12 am
most shareholder lawsuits come from lawyers on class actions who simply flood the world. you presume you don't want to fight it you will give them $3 million. and very early on, i said -- it was recommended that we do that. the first time it happens, 18 years ago. i said why? they shade because the legal fees will cost this, the thing will cost this, it will take time, just say you okay, pay them off. i said we're not doing it. what happened, i didn't realize, such a courageous decision is since then, when we had two or three more, we said the same thing, they stopped suing us, we were not easy pitch and prey. >> different with the government. >> what i'm saying about the $13 billion. no righteousness there, that is a negotiation, i don't think it is actually that you lost the company's money, you got banged for a whole series of reasons, some of which i'm sure are not
8:13 am
legitimate. yes? >> when you luke at -- when you look at -- i want to go back on this one for one more second. you like jamie and think's good leader, i think. >> i think jamie is a superb ceo and i also think he is an utterly honest and decent man who, if he finds something that is wrong, you could say -- could you accuse him saying, well, you should have known, you know? somehow, you should have known. in a company with that wide -- >> when he took on the -- when he took on the investments of bear around wamu, he should have saw -- >> no. >> -- from the government, right? >> he couldn't get t and they pressed him any watch and he did the thing that essentially various people were ordered to do which was -- >> do you think he -- wanted to do t at the time, people thought he was a heist. cover of new york magazine said bank heist. >> on the bear sterns side? >> yeah. >> no. i think he was ordered -- not
8:14 am
ordered. he thought it was the right thing to do for sure? >> for jpmorgan and the country. >> bought it at a very low price and upped the price as he went into it. he didn't know -- no one knew at either of those institutions, you could do no due diligence. >> you have run lots of big companies. >> what does it say about the issue of not too big to fail but too big to manage. >> i absolutely believe that. >> great executives of our time, if that's what you believe he is, can't -- or can get into a situation like this, does that reflect something about the size of these institutions? >> of course it does. look, we have been spinning off companies for, you know, we have spun off eight public companies and the reason -- the primary reason we have spun them off is because we truly believe they would be better managed if they were standing on their own, you know in a big, harsh, light of die and that is proof -- i mean, i'm -- i think generally,
8:15 am
generally, large, large, large institutions, they are unmanageable, shouldn't be managed that way. >> would you break up the banks then? >> i don't -- you know, i don't know if i would break up the banks. i don't really know enough. you're asking me. this is so below my pay grade. [ laughter ] >> let me ask you a different question. put yourself in eric holder's shoes. what is he supposed to do? >> well, look, i -- if there's -- if there was -- there's been all sorts of criticism, why hasn't anybody gone to jail? if there -- if you -- i presume the reason -- god knows they've tried. god knows they spent humongous amounts of money investigating this way, that way, underneath and above p i presume the reason is they can't get they don't think they can convict anybody there's not enough direct evidence.
8:16 am
it is hard in situations like this unless you've got a clear actor who's done a clear thing that you can actually nail you it's pretty hard to get them on generalalities. >> okay. one other issue on this topic and then we are gonna move on more to your world, which is this. we are going to have people of our own, in just a couple hours. you know steve cohen, i believe. what do you make of what has just happened? >> not very -- i don't -- when you say "just happened" has it been -- have they fined him already sniff read it is coming. no, it has happened a done deal. $1.8 billion. they fined his firm, not fined him yet or criminally prosecuted him but they may, still. >> i think they will. you think they would hesitate a millisecond if they could get a direct cause, an action from him that was indictable? you think they wouldn't indict him in the reason that they haven't, i suppose, is because
8:17 am
they can't. now, maybe they will am so the point, they can. what is interesting to me, again, where is the 1 billion 8 going? >> i -- >> i don't think it's going to any individual people who were "harmed". >> you note answer to that. it goes into the general funds. >> and therefore we shouldn't prosecute people or what -- >> wait a second that's not prosecution, you should prosecute if you have evidence and if you can nail it. i actually think the idea of settlement is a very bad concept. i think they should go to court. i think they should determine what the idea that you essentially hijack people and you -- you hold them hostage, to saying if you don't do this, what we want, we will indict you. i think that's bad game. i think what should happen is there should be -- sudden outlook should be outlawed a cause of action, file it, whatever, have the penaltist, some resemblance to actual
8:18 am
reality rather than to hostage taking. >> okay. we will leave that piece of the conversation there. now i want to talk if we could jump around a lot this morning, twitter. >> i will give you a little -- >> please. >> unless you want to -- god knows, i am at least person in a position to complain about anything. but just to give you an idea of what happens when you're on these pressures. i was fined by the s.e.c./ftc, one of those -- [ laughter ] >> do you really not remember? you must? >> which one? i signed the check. i don't remember who it was directed to. [ laughter ] i was find $485,000 this year. yeah. this year. because as a director of the coca-cola company, i bought shares that necessitated me filing for hart scott. hart scott, as most people know, was enacted simply so that
8:19 am
companies could not act in the dark and essentially make a lot of moves that share ploerlshold unaware of. they did this wing hart scott, 30 days, 60 days. didn't know that i missed it by one day. >> your lawyer missed it or you missed it? >> i didn't. how i would ♪ truth is the lawyers of coca-cola missed it and believe me, lawyers at coca-cola are all over everything. you can't -- but whatever, we missed it by a day. they told us, we filed. we sent the -- the other thing is if you file as an individual or whatever, you have to pay 100 or 200,000 just to file. who cares? they came to me and they said, um,s here the thing, pay us $480,000 or we'll go to court. and i said to my lawyer, marty lipton, into the weak little, you know -- >> yes. >> i said irk let, let's go.
8:20 am
let's go to court. i think we have a chance to win. the problem is they will with drought $480,000 fine, which they have told us and they will claim a $10 million fine. so i absolutely felt i was right i screamed to myself and i paid the money because i could not take that risk. that is the position people are in. now, in my case, the idea of a one-day thing becoming that and then being tortured, taken hostage, by the possibility that i have to pay $10 million for that, give in. >> i don't know if that's lesson or not. but let me ask you about this twitter. >> i didn't say it was a lesson. i just said it was a factoid. [ laughter ] i don't intend to repeat it. let me be clear. >> twitter. >> yes.
8:21 am
>> is it worth $40 billion? >> uh -- >> this is your world. >> is it worth it? you have to do worth. no, of course it isn't. will it be in the year 2175? maybe. twitter is only a good investment for those people who got in early wholesale. people who pay -- the only way people put -- nobody is investing in twitter, as nobody does invest in these companies at this stage of their lives, they are looking to score. they are in and out. they are buying it at a $40 billion to sell it, hopefully 40.2 billion, take their profit and go home there's no long-term investors, other than people, i presume, who already have a stake in twitter and various reasons, don't or can't sell it. >> you think all retailer investors like that or institutional? >> no i think it's the rule rule of the day. >> i think you do an ipo or you
8:22 am
do -- or you have something that shoots to the moon. i think the only -- the only actual value that is created and is considerable value, the question is it's taking from whom to give to whom is people who buy it and trade it and everybody -- twitters a capitalization will turn over hundreds of times. if that doesn't tell you there's very little investing going on or -- nobody values the company at $40 billion. that's not sane. what they do is they think they can get away with a point, four points, whatever, go home. >> the battle between facebook and twitter, who is the winner? let me say this, i was at a school a couple months ago asked the kids in class how many people use facebook more today than a year ago, doesn't get a lot of hands? >> no. >> when skied how many people use twitter more than a year ago, everybody raised their
8:23 am
hand. >> yeah. >> is that reflective of your view? >> i think they both have value, they both have audience, facebook's audience is not going away for a huge variety of reasons, not saying it is going to have continued growth, not going to be this great advertising engine, but they are -- their audience is not going away, and twitter is actually not growing but it's stable and its usage is up by its flat population. >> i want to go to area. >> this is -- >> that is obviously iac chairman barry dealer di. coming up on "squawk on the street," activist hedge fund manager dan lowe. and then later on closing bell, tesla ceo elon musk on his latest tech ventures. ahead on "squawk box," washington wizards owner ted
8:24 am
leon sis, revolution growth fund, a $40 million investment. stick around. what he sees with the ipo market now.
8:25 am
i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there.
8:26 am
8:27 am
welcome back to "squawk box." futures right now are indicated down about 26 points or some it was a quiet session yesterday but we did reach in a new high. another new high. president obama is nominating a top treasury department official to run the cftc, timothy -- if you say mossad, it sounds like the -- i guess it is how it pronounced, massad, overseen the tarp the past three years, expected to use the nominating ceremony to call on congress to fully fund the cftc. coming up, revolution growth, announcing a $40 million investment in web-based t-shirt company custom inc. i think make any t-shirt you need? ted leon sis will join us next. programming note, today start 35g9:00 on closing bell, cnbc will be bringing you live coverage from the schwab impact
8:28 am
conference go to impact at cnbc.com for exclusive content with industry insiders and schwab executives. you can see maria will be there.
8:29 am
in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second.
8:30 am
i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. ted leon sis is putting his money at work this morning, fund announcing you the investment of
8:31 am
the online custom t-shirt company, custom inc., a $40 million investment. joining us with more on that as well as his outlook on the markets, at the time leon circumstance revolution growth fund's co-founder, chairman of groupon, owner of the washington capitals and wizards and vice chairman emeritus of aol. thanks for joining us. >> we learned so much from barry diller, you ask me a tough question, i will just say it is above my pay grade. >> i think he said below his pay grade, made all us of chuckle too. i would like to get your thought ounce what's happen income the market lately. twitter's ipo. the last time you were on, we asked but twitter, you said that you didn't have an investment in it but something you would have been interested in getting ahold of. what did you think about where the stock's trading and would you like to own it now? >>. >> an ipo, i thought twice about
8:32 am
it i think it is a company that should be a part of your holdings, but it is a little frothy right now. >> you didn't buy in on the opening day? >> i did not. >> talk about where the market stands right now. we have seen a loft issues coming to market. ipos have been at record levels, the highest we have seen in five or six years. that has some people starting to worry, wound fer things are feeling top i. is that your take? >> i do i think a flight to quality brand and market leaders make sense, think companies with very, very strong fundamentals. you mentioned that we had made a big investment in an e-commerce social shopping company today qualed custom inc., here in washington, d.c. it has very strong fundamentals, at a couple hundred million run rate as it is, very, very
8:33 am
profitable. it has a lot of green field in front of it hits a lot of the fundament fundamentals, driven by big data, communal shopping experience. the founder of the ask this great visionary, plus a terrific operator with high levels of integrities, built the company that has -- considered one of the best places to work in the country. i think a flight to quality when there is a frosty marketplace and looking at fundamentals is the right way to invest. >> you just were talking custom inc., the company you are investing $3 million in. made it sound like it was a cloud computing company this is a company that sells customized t-shirts for groups and occasion, talking about a basic consumer good now using technology to get thought in a different way, right?
8:34 am
>> part of the next generation internet revolution what looked like fundamental high quality companies, driven with the platform, custom ink, its counter, mark katz, focused on community i social shopping, lots of upside to this company, a double bottom line company, just launched a new site called booster, which allows individuals to raise money around a cause or a mission, they have a division called pair up, which will open up a new revenue source, targeted media, a consumer is buy t-shirts for a family reunion or charitable cause it can opt-in and bring in a sponsor and bring the cost for the t-shirt down. allow a consumer to bring in an
8:35 am
advertisement that they feel is comfortable for their cause. we felt this was a very, very innovative way of using the internet. we thought it was fair ly bride. one thing we are seeing, private companies lose sight of what their exit is. this is a company profitable today. it's not focused on an immediate ipo or some kind of exit. it's trying to build real, real quality and, you know, if you read a lot about what warren buffett has always believed, you know, finding products and service and high-quality companies that make things that you use, i learned about this company through my son, zack and, and my daughter, ellie, my son used it when he was at the university of pennsylvania, he ran his fraternity, alwaysing buying t-shirts for the softball team, group buying and then have
8:36 am
to have a signup showed and put all of his roommates and his friends, their name, their e-mail address and so there's this huge database that's been built and the viral marketing around this company and the repeat business is really, really strong. >> but ted, you said something that makes me wonder whether retail inxrers get ahold of great bargains, great companies at great prices, like you just said. you talked about how would you buy a company like this, doesn't have any plans to go public any time soon. you think twitter came out at a very fair price, which is why you didn't buy it i just wonder if retail investors are ever going to get the chance to invest in some of these great growth companies, great technology companies, before they are brought to market, at this point, a lot of people think after facebook, twitter trade, maybe they can't get in at the level he is that are still good levels or a price where aid want to buy in. >> i have always believed that you should follow main street more than wall street and that you should be in these deals for
8:37 am
the long term. you know, as you know, i was in early in group reason, i served as co-ceo. now, eric lech cow ski is running the company, he was the founder of the company and is now ceo. you know, there's a good case where main street really is adopting these tools and, you know, using the services, not only via e-mail but more and more on the web and more and more immobile, we believe and i believe that that's great long-term holding, so you can look quarter to quarter and there's ups and downs on these companies, but i think in the long term that an e-commerce company that gives you great deals and is available in a ubiquitous man otheren a global basis that that's a company that's real, real good holding, it be in the long term. >> ted, thank you so much for joining us today. >> thank you. look forward to coming on and being a co-host with you guys again. >> all right.
8:38 am
come back soon. ted leon sis, we appreciate it. earnings and upgrades to tell you about, plus tech staff cut in half, more than half. your list of stocks to watch. then the big box office draws for the holiday season. i max sees a rich gal fant.
8:39 am
8:40 am
8:41 am
welcome boack to "squawk box." the government raising concerns about the muscle disorder drug, i think for -- a weird story, because a couple of similar drugs back in september didn't -- the fda had some questions and they thought mayber maybe er er is rep ta's drug. but it was declared premature in light of the previous study's fail your it is for duchesne muscular dystrophy. the fda indicated that new data
8:42 am
raised considerable doubt about the effectiveness measures used in a midstage trial. they thought it was going to be good. competitors had a set bang and there but for the grace of god the same thing happened to them. so it's a horrific -- not a huge company, market cap was almost 1.3 billion. you can take 54% off of shareholder -- off the market cap this morning. dish network -- if you watch the bottom ticker on the nasdaq that goes by every two seconds, dish network, third quarter profit of 68 cents a share, well above estimates of 43 cents and added 43,000 new subscribers during the quarter. when we come back, catching fire, the latest film in the hunger games series, likely to be a big box office drawer. i max ceo rich goal fant will join us to talk about the other release and if it is really
8:43 am
booming. be right back. is mine was earned orbiting the moon in 1971.
8:44 am
afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy.
8:45 am
get an auto insurance quote. usaa. we know what it means to serve. many americans will make a pilgrimage to the theater this weekend. it is catching firesome that the new hunger games?
8:46 am
>> it is. >> richard gelfond is here. i saw "gravity requests going a norm theater but the glasses. can i see it 3-d at the imax you don't know it? >> 3-d and 2-d. i agree with becky, are you crazy? gravity was made to see in i max. a you're with sandra bullock floating from space station to space station. >> not what i'm thinking b thinking about george clooney. he is -- no anyway. seeing some of his recent comments, trashing all of his buddies, did you see this? >> i didn't see that >> trashing lee yoerks trashing a couple other guys. i guess he thought that he was at -- what, besides "gravity," hunger games, what is -- what about hunger games makes it an i
8:47 am
max -- >> this movie, every scene filmed in the arena was filmed with i max cameras, the aspect ratio expands. think you're watching an image like this a letter box and then when they go in the arena, goes up like this. the last half hour of the movie is filmed in i max. i think it's going to make a big difference. chris nolan shot the last two batman movies in imax. >> my son's favorite director. >> he kind of invented the idea of using these cameras for commercial films and it will make what's gonna be a great experience even better. >> wow, so, it's actually on the front end you got to use the imax technology to take full advantage of it on the imax theater later. >> you down the have to gravity, for example. >> did not? >> did no it was the kind of movie just con deuce city of
8:48 am
imax, around $70 million so far, just in the imax box office. when you use the imax cameras, it adds some additional dna and makes it special. >> "the hobbit" using any on the front or just -- that would be great on imax. >> peter jackson actually had some imax use in mind but as production ran long, which it is, you know, peter tends to always gets them done but gets them done late, not going to have special technology but hobbit will look great in imax anyway. >> i have been kind of amazed how imax seems to have boomed the past five, six, seven years, used to be something would you see at the planetarium, you went to see something. now seems like just about every movie i want to go see, i want to see on imax. how have you deployed? you are available in a lot more places? >> three things, the network has grown so rapidly, our feeder count is five times now what it was five years ago so there are lots of places to see t second thing is i think a lot of the in-home changes, where you have
8:49 am
bigger tvs, you have shorter windows, you have games, other things to do, when people go out, they say i want to do something really special and the third would be technology. we continue to make the technology better, such as using the cameras. so, we can do more and create -- >> put it in my house? >> we can actually now. >> cost a quarter of a million dollars. there's two a mass product we just announced for overseas or more of a mass product, cost 250,000, not be sold in the u.s. and tcl and china is our partner in that. the u.s., joe, especially for you can get the $2.5 million system. >> 2.5 million? >> yeah. >> could you loan that to me for about five years? >> um, you'd have to loan you a bigger house is the problem. >> yeah, you would. >> that's exciting, all this technology is -- >> five years from now, we will have a version that is truly a mass market version? >> reluctant to go too far down in the price point because we want to keep that really premium
8:50 am
experience, with time, you will see the price come down somewhat. >> the -- you need more, you need the neighborhood theaters for imax, too. do you need too big of a building to do it? >> yeah, that is the problem. n building to do it? >> that is the problem. it scaleable in the field of vision but it has to be a certain wow factor. >> so it has to be at the science center or -- it may be a drive but it's worth it. >> see your normal movie in the neighborhood theater and for the big ones -- >> some of the normal theaters have it, too. paramus has one. >> if you want to take your kids to certainly really special or see it yourself, get in the car. >> when we come back, we'll check in on the new york stock exchange with james cramer's biggest movers right after this.
8:51 am
tomorrow it's value investor wednesday. get your portfolio ready for next year now. twins. i didn't see them coming. i have obligations. cute obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. welcome back. how is everything?
8:52 am
there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
8:53 am
8:54 am
let's go down to the new york stock exchange. jim cramer joins us right now. jim, i know you've been running around this morning and trying to get down to the new york stock exchange and different placing. i don't know if you saw andrew's story earlier with barry diller where he told this story about being find by the government $480,000 or something because he made some trade as a coke director, he wasn't able to make that trade under hart-scott, said he missed the deadline like a day. he said he thought he was right and he wanted to fight it but his lawyer told him he would potentially lose and he would have to pay a $10 million fine if that were the case. it tells you a little bit about the government's heft. >> mark cuban is the only guy i've ever seen fight the government. fighting the government is pretty much a fool's game. it takes unimaginable fire power and potentially more. diller loses ten minutes of his
8:55 am
times and then he's missing days. i don't blame him. i disagree on the twitter story. i think there are people who are investing in twitter but they're not investing properly. in other words, a lot of people came in and said i really like this product and i'm going to see it through. there are others in on the deal and they flipped. there's two classes of people. i don't want to just lump everyone together. a lot of people came into twitter saying this was going to be a great product overtime and not 2075. >> that's something ted leonsis said, too. he would look at this as a long-time -- >> i don't think people should have paid more than 26, 27, 28. the idea that people are flippers, no. a lot of people came into it saying i really love the product, in the same way they may like the product like netflix. netflix is overvalued but they like it. before we decide everyone is in
8:56 am
for 70 cents, two classes of people, hedge fund who is flipped at the opening and people who have come in and said i'm going to own it, they don't understand valuation, they own it, lose money, buy more and maybe they kick it out. >> that's a good point. we'll see you in just a few minutes. >> coming up, the dow closed at a record high yesterday. coming up, we'll ask our guest host how the stock market will end the year, we want an exact number with decimal points. and s.e.c. chairman mary jo white. (vo) you are a business pro.
8:57 am
maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national.
8:58 am
because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. but it sure feels that way. because with power ports... and wi-fi... and in-seat entertainment, for everyone on board, now when you fly, time flies too. (flight attendant) sir, we're about to land. (vo) we're adding a brand new plane, with all this, every week. it's just one way we're building the new american.
8:59 am
let's get back to our guest host, tom lee, for the last word. so by the end of next year, could you give us a target? we got 1, 890 from -- >> i heard those numbers. we have not published -- >> how about the end of this year? >> you know, we're at 1,775. i don't think that should stop anyone from buying equities here. >> alternative? >> i think they should buy lower pe stocks -- >> because of a lack of alternatives? >> i also think that if the
9:00 am
economy is strengthening, which is our bet, it going to be hard to make money in other asset classes. equities will deliver real returns. >> because the bond market has to go done? >> yeah. i agree with your point that whatever the broad market expect, it's not going to happen. >> tom, appreciate it. thanks. >> that's all for "squawk box." right now it's time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." eem ca i'm carl quintanilla, jim cramer, david faber. what a show we have today. the dow starts today as another record high. then theres at bond market after being closed for veteran's day, a strong overnight

118 Views

info Stream Only

Uploaded by TV Archive on